Chinese Company Denies Tire Defect

DAVID BARBOZA and ANDREW MARTIN

Wednesday

Jun 27, 2007 at 5:22 AM

The manufacturer called problem claims fabricated, but the tires have already been linked to at least two deaths.

SHANGHAI, June 26 — The Chinese manufacturer of 450,000 tires that United States regulators have ordered to be recalled denied Tuesday that they were defective, saying the accusations might be fabricated.

The tires, which were sold for use on vans, sport utility vehicles and pickup trucks, have already been linked to at least two deaths in the United States, possibly because of a missing “gum strip,” which could allow the tire treads to separate.

Tread separation is the problem that led Firestone in 2000 to undertake one of the largest tire recalls ever in the United States, involving millions of tires.

The Chinese manufacturer, the Hangzhou Zhongce Rubber Company, disputed the assertions on Tuesday and hinted that the recall might be an effort by foreign competitors to hamper the company’s exports to the United States.

“This is concocted out of thin air,” said Xu Youming, a manager of legal affairs at Hangzhou Zhongce, China’s second-biggest tire maker. “The structure of a tire can’t be decided by an individual. Any change in the structure requires technical assistance. Zhongce couldn’t possibly leave out the gum strip on purpose.”

The recall is the latest incident involving problem products entering the American market from China — including contaminated pet food ingredients, toothpaste with harmful chemicals and lead-painted toys. This case, like some others, involves suggestions that a Chinese manufacturer cut corners and altered its production process after winning a large contract.

In Congress, there were demands that the National Highway Traffic Safety Administration stop squabbling with the tire’s American importer, a tiny New Jersey company, over who should pay for the recall and just begin it immediately.

Senator Charles E. Schumer, Democrat of New York, said the series of reports of flawed Chinese products demonstrated a need for stronger federal regulation, particularly of imports. “It’s clear that unless the government takes responsibility, nothing is going to happen,” he said.

Federal officials sent a letter Tuesday to the importer, Foreign Tire Sales of Union, N.J., formally demanding the recall of about 450,000 radial tires because some were missing a safety feature that prevented tread separation.

Foreign Tire Sales had brought the problem to the government on June 11 and asked for help with the recall, saying it did not have enough money to pay for it. The company’s lawyer, Lawrence N. Lavigne, estimated that a recall would cost it $50 million to $80 million.

Officials at the traffic safety agency insist that the importer has the responsibility for the recall.

“We made it very clear that crying poverty is not an option,” the administrator, Nicole R. Nason, said. “If you import the equipment, you assume the responsibility.”

Foreign Tire Sales has five days to respond to the order. Ms. Nason said her agency would seek “very strong penalties” against the company if it did not comply.

Mr. Lavigne said Tuesday evening that the company would start the recall as soon as the federal notification was in hand. “We will wait to get their order and create a remedy plan and begin a recall,” he said. “When the money runs out, that’s the end.”

Foreign Tire Sales has been purchasing and importing tires from Hangzhou Zhongce Rubber since about 1990. In 2000, it asked the company to design and manufacture radial tires for pickup trucks, S.U.V.s and vans. The tires were sold under the Westlake, Compass, Telluride and YKS brands.

They were supposed to include a gum strip between the steel bands that prevented them from separating. Mr. Lavigne said the gum strip cost less than a dollar a tire to install.

But in October 2005, officials at Foreign Tire Sales became suspicious that the tires were made without the strips.

Nearly a year later, in September 2006, Hangzhou Zhongce officials acknowledged that they had “unilaterally” decided to omit the gum strip, according to a report by Foreign Tire Sales for federal regulators.

But on Tuesday, officials at the Chinese company seemed defiant, saying Foreign Tire Sales had been a client for nearly 10 years and had never complained about defective tires.

They also suggested that the problem was tied to a surge in American imports of Chinese-made tires, which could be harming American tire makers.

“Chinese tires have become an important force in the international market,” Mr. Xu, the legal affairs manager at Hangzhou Zhongce, said. “A lot of people would do things in order to cut the throat of Chinese manufacturers. I think you should think about the issue thoroughly. All American tire companies have set up plants in China.”

Indeed, since Firestone’s vast recall in 2000, the world’s biggest tire makers have rushed into China to build plants or to team up with Chinese manufacturers, in part because of the lower labor costs and also because of this country’s soaring demand for automobiles.

According to the Rubber Manufacturers Association, about 40 percent of the 307 million tires that were produced for sale in the United States last year were manufactured overseas, compared with 21 percent in 1996.

China is the largest exporter, shipping 32 million tires to the United States last year.

Hangzhou Zhongce was once a state-owned company that in the 1950s made rubber shoe soles.

In 2006, it had about 8,000 employees and nearly $1 billion in sales and had signed deals to supply or team up with large tire makers including Goodyear, Yokohama and Cooper Tire, company officials said.

The American recall involves assertions that experts say point to a common problem: Chinese manufacturers win a contract after agreeing to make a product, following certain guidelines or specifications, and then, often for cost reasons, switch to a cheaper ingredient or process that lowers costs.

Hangzhou Zhongce is said to have produced the same tires for at least six other distributors in the United States, according to Mr. Lavigne. The distributors either could not be reached or declined comment Tuesday.

This is not the first recall involving Hangzhou Zhongce. In August 2005, Cooper Tire recalled more than 49,000 tires made under contract by the company because of problems with loss of air pressure.

Never miss a story

Choose the plan that's right for you.
Digital access or digital and print delivery.